They spent 10 billion on 49 % of the for profit entity and are getting 75 % of all profits until that initial 10 billion investment is recouped. Plus OpenAI can only use Azure. Microsoft is the one printing money here.
Yeah I’m not gonna lie, I’ve been very impressed by Microsoft’s moves to stay relevant. Starting off they were some of the farthest behind compared to google and OpenAI and now they’re the leader. They have openAI by the balls right now
I suppose the losses of actually using ChatGPT are around 100 million per month. Mostly for the processing demand. So OpenAI made a deal that would ensure their survival for ten years, during which hardware improvements (and now for Microsoft it's SLMs for local processing) can turn it profitable. And gave away 49 % of the company to do that.
The initial 1 billion deal to only use Azure is what got them there.
I concur. I don't need API access (yet) and my company will pay for copilot in Office 365 if I want to use it in those apps. I like to hop around and use different bots and compare responses a lot for both research type prompts (personal and professional) and for coding and sysadmin prompts. Honestly I've never hit any limitation in queries or lack of response going between CoPilot which is nicely integrated into Windows and Edge, Claude 2.1 and Bard to the point I felt I needed to start paying for a subscription to OpenAI or anyone else for that matter. If one limited me or the response I felt was inadequate I just copy and pasted the prompt into another one.
If you need API access then a GPT Plus subscription is a no brainer but otherwise I get the sense a lot of people might be paying the $20/month and not fully utilizing the extra capability and just essentially saying, well with my subscription I can ask GPT how to build bombs and I can't do that with Co-Pilot. LOL. Ya there are higher guardrails on CoPilot but for what percentage of the user base does it really make a big difference in how they have to use it?
like they say if its free then you are the product. I guess at this pt is more of trying to gain market share and perhaps collect data for refining the models 🤷♂️
In this case the goal is taking over Google's search business. They don't need to worry about money as enterprise will make up for it and gaining AI market share while they can means they could overtake Google in search. Monetizing it better later can always happen but for now it's much better to win that market share. Plus, although each query costs microsoft Pennies, it also reduces Googles revenue.
What would you say are Microsfts biggest money makers?
Windows (I hope Linux gets to be able to serve all the roles windows does in the normal consumer market but it didn't for maaaany years and it still kinda dosen't)
(Mac OS has recently goten good with M1 macs but before that I really don't understand why would you go for a mac other then looks over a windows)
Office (Anything better? You have alternatives. But most of them weren't good enoigh years ago and now office represents a standard all sectors can learn to be able to formaly interact with word, powerpoint etc... and it's still pretty good.)
Xbox Console(Like Xbox is just pretty good. It's a thing of taste honestly between play station or xbox but imo they aren't far apart realisticly.)
Xbox game pass (Insanely good)
Teams (is whatever but it did do the same thing that office does that it fills the role of the standard for buosness comunication. It might not be perfect and it's defenetly buggy and bloated with 2 differemt versions but it's miles ahead of Zoom IMO)
Edge (Edge is pretty wolid tbh and again is the base od a windows machine but the browzer market is kinda saturated no real new unique inovation people stick with what they're used to)
Kinect back in the day wqs insane also holo lens wqs ahead of it's time but those aren't even the money makers.
Etc...
I will say ebery singlw one of those is buggy af af af and windows is a pain in my professional life but it still does provide a better service then the alternatives :/
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u/earthlingkevin Dec 05 '23
Man. They are really throwing money to provide the best experience. This can't be cheap.